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Cotton Market Weekly(16/01/2015)

Cotton traders and analysts were surprised by a robust weekly export sales and shipment report released by the U.S. Department of Agriculture early Thursday morning, Jan. 15. The department reported net sales of U.S. upland cotton totaled 441,800 bales for the week ended Jan. 8, a marketing year high. The top two buyers that week, China and Vietnam, accounted for 311,500 bales of the total. Turkey followed distantly with purchases totaling 54,000 bales. Last week’s fall in cotton futures prices below 60 cents may have been the catalyst for the surge in export sales.

Export shipments that week also set a new marketing year high at 227,800 bales, up 11 percent from the previous week and 21 percent from the four-week average. The primary destinations were China, Indonesia, Vietnam and Turkey. According to one analyst, U.S. export commitments for the 2014-15 marketing year now total almost 8.12 million bales or 84 percent of the current USDA forecast.

The bullish export news seemed to support cotton futures throughout Thursday’s trading session at the Intercontinental Exchange (ICE). Contracts posted session highs moments after the report was released, and March cotton traded up to 60.27 cents per pound before stepping back and settling 51 points higher at 59.49 cents. December cotton settled at 63.42, up 41 points. In contrast, the grain and oilseed markets were under pressure Thursday. The rally for cotton futures enabled them to regain a portion of the losses incurred during Wednesday’s ICE session.

Cotton prices dropped significantly following reports of weaker U.S. retail sales in December and the World Bank’s lower estimate for global economic growth. Retail sales last month were down a seasonally- adjusted 0.9 percent, the poorest performance since January 2014, according to one analyst. At the close of trading Wednesday, the four nearby contracts had posted triple-digit losses. March settled at 58.98 cents per pound, down 117 points, and December was down 89 points at 63.01 cents.

This week began with the release of USDA’s monthly supply and demand reports which pegged the U.S. crop at 16.08 million bales, up from 15.92 million estimated in December. U.S. domestic consumption and exports were unchanged from last month, and ending stocks were increased by 100,000 bales. The Texas crop is now estimated at 5.98 million bales, up 30,000 from the December estimate. High Plains producers are expected to harvest almost 3.47 million bales, and the Rolling Plains crop is projected at 759,000 bales. The Oklahoma and Kansas crop estimates were unchanged at 265,000 and 52,000 bales, respectively.

USDA raised its estimate of world production by 190,000 bales to 119.17 million. World consumption was lowered 360,000 bales to 112.24 million, and ending stocks are now estimated at 108.64 million. Cotton futures showed little reaction to the supply and demand reports after they were released at 11:00 a.m. CDT.

Contracts were already trading lower before the reports were released and remained on negative ground throughout Monday’s ICE session, giving back gains made during the three previous sessions. March cotton settled 103 points lower at 59.73 cents per pound, and December settled at 63.48, down 97 points.

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AJ Armstrong Takes the Helm as Manitoba Seed Growers President

Video: AJ Armstrong Takes the Helm as Manitoba Seed Growers President

The Manitoba Seed Growers Association (MSGA) held its first annual SeedLink Conference in Brandon last week, where a new president was appointed to take the helm of the organization.

A.J. Armstrong of Armstrong Seeds in Boissevain took the gavel from Past-President Tom Greaves. In a sit-down interview, Armstrong shared insights into his personal journey within the seed industry. Born into a family deeply rooted in seed cultivation, he took the reins of the family business in 2003, building on a legacy initiated by his father in 1980.

Regulatory modernization emerged as a significant focus of the conversation. While acknowledging the complexities of the process, Armstrong expressed optimism about the potential benefits for seed growers once the regulatory framework is finalized.

Discussing the dynamics of working with family in a business setting, he stressed the importance of open communication.

Operating with a streamlined team that includes his mom as the bookkeeper, his father as the “gopher” handling specific tasks, and a dedicated employee for day-to-day operations, the Armstrong family has successfully navigated the intricate balance of personal and professional relationships.

Open discussions about roles, responsibilities, and business plans contribute significantly to the smooth functioning of a family-operated seed business,” he said.

SeedLink is a new event; the decision to explore a return to a two-day annual meeting format sparked enthusiasm among industry partners, including key players and sponsors like SeCan, FP Genetics, Canterra Seeds, and numerous others.